Lake County wine grape industry gaining identity despite economy

Over the past 20 years Lake County has worked to create its own identity and premium wine standing. There are now 32 wineries in the county and 8,400 acres of varietal wine grapes grown by 148 growers.
Imports and the U.S. recession have hammered U.S. wine sales, particularly premium and ultra premium wines. Premium varietal grape prices have suffered right along with the wine.
With relatively little winery buying and low prices, many growers consider custom crushing their grapes each year and sell wine in the bulk market.

Lillie “Jersey Lil” Langtry, the London beauty whose scandalous behavior shocked the populace on both sides of the Atlantic around the turn of the century, also put Lake County, Calif., wine on the map.

The actress, once called the most powerful woman in the world, made wine from Lake County grapes she proclaimed as the “greatest claret in the country.”

That was in the late 1800s. She sold the property in 1906 just as another famous woman, Carrie Nation (with her notorious temperance movement), was shaming the nation toward Prohibition.

Just after the start of Prohibition in 1921, Lake County still had 28 commercial wineries and 10,000 acres of vineyards. It was the largest pre-Prohibition grape-producing county in California.

Lake County is making a comeback - striving to return to the prosperity of a century ago.

Unlike other areas of the state that planted new vineyards after Prohibition, Lake County did not. There were only 100 acres of commercial grapes in the county in 1965.

In the mid-1960s, when Robert Mondavi began his quest to put Napa Valley and the North Coast on the world premium wine stage with varietals and the California mission style of winemaking, the renewal stretched into Lake County.

However, Lake’s role early in the transformation was primarily as a supplier of grapes to wineries in Napa and other North Coast counties. Few wineries were established in the county. However, over the past 20 years Lake has worked to create its own identity and premium wine standing. There are now 32 wineries in the county and 8,400 acres of varietal wine grapes grown by 148 growers. Lake County is part of the four-county North Coast (Napa, Sonoma, Mendocino and Lake) Appellation. There are also seven regional appellations within the county.

The Lake County Winegrape Commission (LCWC), formed in 1992, is playing a major role in creating individuality for Lake County wines.

In 1991 a short-lived California Winegrape Commission was voted out. However, a state law passed at the same time allows counties to create commissions. The Lodi-Woodbridge area was one created. Lake County was another.

David Weiss, owner of a Lake County farm management company, is a former chairman of LCWC.

“The commission has been really important to Lake County wine grape growers and wineries,” said Weiss. “Their effort to promote Lake County has been a driving force in fostering the growth of our industry.”

Weiss manages 730 acres of wine grapes and 400 acres of pears under the name Bella Vista Farming Co., of Kelseyville, Calif. Lake County has a longstanding reputation for producing quality Bartlett pears. Most of the orchard/vineyard acreage Weiss manages is on the Quercus Ranch. He consults on orchards and vineyards owned by about 20 different individuals.

Weiss grew up on the family’s Yolo County row crop farm near Woodland. He is an industrial engineering graduate from Stanford University. After a decade in the tech sector and several entrepreneurial ventures, he was offered a job 17 years ago managing the Quercus Ranch by its absentee European investor.

“I grew up in a farming family in the Sacramento Valley, so I understood farming. However, pears and grapes were new to me, but the size of the Quercus operation presented a challenge and I felt good about moving to Lake County,” said Weiss.

Economic realities of California grape growing

Whatever allure and romanticism Weiss assumed was in premium wine grape growing almost two decades ago have run head long into the stark economic realities of growing California wine grapes today. Imports and the U.S. recession have hammered U.S. wine sales, particularly premium and ultra premium wines. Premium varietal grape prices have suffered right along with the wine. This year Weiss experienced that once again.

Some grapes were left on the vine because there were no buyers. Others were custom crushed by growers unable to find a home for them.

“There was some buying activity in the fall, but not enough. Prices for grapes this year were pretty deplorable. Prices right now are not sustainable, and I think wine grape buyers were taking advantage of the situation,” Weiss said. “I was not surprised, but I was disappointed.”

Weiss is like many growers who are faced with the decision of letting grapes rot on the vine or custom crush them, hoping to sell the juice later at a profit after paying for fermentation and storage. He crushed organic Zinfandel, non-organic Merlot and a small quantity of Sauvignon Blanc. He did not custom crush unsold Chardonnay or very much Sauvignon Blanc. The huge influx of imported Chardonnay into California in 2009 continues to hang over the white wine market.

“It was a difficult year. Rains at harvest made it even more challenging. We basically condensed an eight week harvest period into five. However, we were more fortunate in Lake than growers in Sonoma and parts of Napa. The weather was much worse there.”

However, Weiss remains “fairly optimistic about our future in Lake County.” One reason is land prices are lower than in other areas of the North Coast. Many of Lake County’s vineyards were planted in the late 1990s and early 2000s and are well suited for mechanization, making operating costs more manageable.

“You cannot mechanize everything, but we can mechanically harvest and mechanical pre-prune. I think we are more competitive as an industry because of our newer vineyards,” he said. Many of the county’s grapes are trellised using vertical shoot positioning and that offers efficient canopy management. Drip systems are universal and programmed to match rootstocks and varietal clones.

“I think we are also well–positioned because our wines are in the $20 to $30 per bottle range, and they are starting to take off again.” Wines priced $50 or higher have been hardest hit by the recession and have been slower to recover. “There are rich people who will always be in that market. A lot of people in the wine business chase that market. I don’t know if that market will come back quickly or even come back.

“Growers are under a lot of pressure right now to cut costs, but I think we are better suited to come out of this when things improve. Our operating structure is competitive. It is not Central Valley costs, but it is not typical North Coast,” Weiss says. He estimates it costs about $4,000 per acre to produce wine grapes in Lake County.

Custom crushing decisions

With relatively little winery buying and low prices, many growers consider custom crushing their grapes each year and sell wine in the bulk market. “Psychologically, it is tough to spend all year producing a crop and then not be able to sell it or get a decent price for the grapes. However, I think a lot of banks are weighing in on the cost of custom crushing. It takes deep pockets to bulk wine.”

Growers are not attuned to aggressively following the bulk market. Weiss believes it is imperative that you “listen” to wineries and bulk wine marketers before making any custom crush decision. Like this year, Weiss said he kept hearing that it is not the year to bulk whites, but may be a “pretty good bet” to custom crush Cabernet Sauvignon and Merlot or other reds.

“When times are tough, wineries spend less money buying regions and quality. They tend to buy on price and everyone is becoming aware of the increasing impact on California markets from foreign wines.”

Weiss added that the consolidation of wineries worldwide is also making it challenging to sell grapes. Growers do not really have a way of analyzing the foreign markets except through brokers. “Growers are trying to get educated on this new global market, but they really do not have the tools,” he said.

The 2009 shipments of large quantities of Chardonnay, primarily from Australia, was the latest wake-up call that California is in a global wine marketplace.

“A grape grower cannot turn Chardonnay into Pinot Noir like a row crop grower can rotate crops. Yes, there are ways to graft to change varieties, but it is expensive and you really do not get uniformity; grafted over vines are never the same after a variety change,” he said.

Some growers have tried this in grafting over Merlot to the far more lucrative Pinot Noir and now the Pinot market is “stabilizing.” Some of that “new” Pinot is coming from less desirable regions for the quality necessary to produce in demand grapes. “I am not saying this changeover is doomed, but I think it is in for a rocky road ahead,” he said.

This uncertainty prompted Weiss to put on hold development of 300 acres of new ground for vineyards. Some of it has been on hold for 10 years. “I think it will be two to three years minimum before there is sufficient demand to plant grapes for a new contract with a winery,” he said.

Sauvignon Blanc reputation

Lake County has gained a reputation for Sauvignon Blanc and is developing one for its Cabernet Sauvignon, particularly in new mountain vineyards. “Most of the new acres developed in the past 10 years have been either land never planted before or old walnut orchards. The first batch of Cabernet 10 years ago was too intense. We are still on a learning curve in how to deal with tannins, but it is getting better with a combination of new vineyard management practices and winemaking techniques. We are starting to get recognition for our Cabs.”

Numerous other varietals do well in the area and are on the rise, such as Petite Sirah, Merlot, Syrah, Cabernet Franc, Zinfandel, Tempranillo, Chardonnay, and Riesling.

Lake vineyards are planted mostly in 8 to 10 foot rows with 6 feet between vines. Weiss says rootstock selections in the post-phylloxera area are pretty well matched to soil conditions and varietal clones.

Rootstocks in the Lake County cover 5C, 5BB, S04, 101-14. In the mountains, it is 110R and 1103B.

Fortunately, Lake County is a drier area than other parts of the North Coast and with the lower humidity, it does not have the high powdery mildew pressure. Weiss relies on the University of California powdery mildew model developed by plant pathologist Doug Gubler to time wettable sulfur applications, usually on a seven to 14 day schedule.

Weiss also works to open the canopy to reduce powdery mildew pressure.

Potassium is mostly applied to valley vineyards to make up for a nutrient deficiency. Phosphorous seems to be the limiting factor in mountain vineyards that need adjusting with additional P.

Weed control is always a challenge, especially in organic vineyards. For years, Weiss has used a hoe plow to control weeds between vines. However, that moves dirt and debris from under the vine to the rows where it must be disked down, an added expense.

For several years, Weiss has been experimenting with hydraulic cultivators called Clemons and Sunflower. They are expensive, but gaining favor because they reduce disking.

Both disturb less soil. “I am very impressed with these new cultivators,” he said.

Pests are minimal. “Mites can be a problem, but we take care of them. There is some good, very targeted soft chemistry we can use, if mites or other pests show up.”

The European grapevine moth (EGVM) has surrounded Lake County, but has not been detected here. Although the major infestation in Napa was dramatically reduced last year, Weiss would not be surprised if EVGM turns up in Lake.

“Fortunately, we have a lot of experience with pheromones for coddling moth mating disruption in pears. There is an effective pheromone for EGVM that we can utilize, if EGVM shows up,” he said.

In the meantime, Weiss and his fellow Lake County grape growers and vintners will continue to challenge the pesky wine grape market. The LCWG has launched a new marketing campaign to meet that challenge.

It is called “Lake County Rising.”

The campaign is designed to reach wine grape buyers, retailers, distributors, consumers and others connected to the wine industry. It seeks to inform them about the high quality and friendly price-points that the region has to offer. Additionally, it highlights the dedicated personalities behind the wine industry in Lake County. “The word is starting to get out there,” said Shannon Gunier, LCWC.

“The Lake County Rising campaign is more about who we are than whom we are not,” said Gunier. “We have always had to work hard as a region and that hard work is paying off,” she continued.